Health & Welfare Plans Newsletter

December 18, 2018

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[Official Guidance]

Statement from the Department of Health and Human Services on Texas v. Azar

"The recent U.S. District Court decision regarding the [ACA] is not an injunction that halts the enforcement of the law and not a final judgment. Therefore, HHS will continue administering and enforcing all aspects of the ACA as it had before the court issued its decision." U.S. Department of Health and Human Services [HHS]

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[Official Guidance]

Text of HHS Proposed Regs Rescinding the Adoption of the Standard Unique Health Plan Identifier and Other Entity Identifier

39 pages. "This proposed rule would rescind the adopted standard unique health plan identifier (HPID) and the implementation specifications and requirements for its use and the other entity identifier (OEID) and implementation specifications for its use. The decision to propose to rescind the adopted standards was made following a careful assessment of industry input, as well as HHS's intention to explore options for a more effective standard unique health plan identifier in the future." U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

Guidance on Integrating Proposed HRA Rule with Employer Mandate

"[ IRS Notice 2018-88 ] addresses the interaction between the proposed HRA rule and the ACA employer mandate provisions and nondiscrimination rules under the tax code, and proposes changes so these provisions would work with [individual coverage HRAs]. The effective date ... matches the effective date in the proposed HRA rule, which is plan years beginning on or after January 1, 2020. Like the proposed HRA rule, the proposed guidance may not be relied upon by taxpayers and others[.]"
Willis Towers Watson

[Guidance Overview]

HRA Expansion: An In-Depth Look at the Proposed Rule

"Without any new guidance or modification, employers that offer different HRA maximums to different classes or raise their HRA contribution due to change in age, under the age-banded premium categories in the individual market, would violate the 105(h) rules. Treasury and IRS anticipate releasing future guidance to address these situations." Compliance Cornered Blog

[Guidance Overview]

IRS Guidance on Parking Expenses for Qualified Transportation Fringes Provides Opportunities for Exempt Organizations

"[If] the employer pays a third party to allow employees to park in the third party's parking lot, and the employees pay for the parking using a pre-tax wage reduction option, the employer's UBTI is based upon the amount of employees' income exclusion. If the employer were to eliminate the pre-tax wage reduction program, the employer would also eliminate the parking expense disallowance and related UBTI. Another opportunity is the special rule enabling many employers who own or lease the parking facility to retroactively reduce the amount of disallowed parking expenses.... Perhaps the biggest opportunity involves the 'primary use test'." Schneider Downs

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[Guidance Overview]

Michigan Amends State Paid Sick Leave Law

"On December 13, 2018, outgoing Michigan Governor Rick Snyder approved a bill that substantially amends various aspects of Michigan's paid sick leave mandate. Although not a complete cure to the State's paid sick leave bug, when the amendments go into effect -- currently expected in late-March 2019 -- they will impose a strain of paid sick leave that is much less burdensome than what employers would have faced under the paid sick leave ballot initiative that was passed by the Michigan state legislature earlier this year." Seyfarth Shaw LLP

Improper Delegation of Authority Could Cost a Plan its Deferential Standard of Review

"Review vendor contracts and plan documents to ensure that claims administrators have the final decision-making authority -- and do not include provisions allowing the employer (plan sponsor) to override those determinations. If a plan intends to delegate authority to a third party through a contract (such as an ASA), that contract should state that it is part of the plan documents.... [O]nce that document is considered a plan document, it must be disclosed to participants upon their request. Confidentiality provisions in an ASA may preclude such disclosure." Trucker Huss

What Just Happened to the ACA and What Happens Now?

"Because Judge Reed O'Connor did not issue an injunction after ruling the ACA unconstitutional, supporters of the law cannot file immediately for an appeal. The process will be more complicated.... [C]onservative legal scholars likely might agree with the judge that the mandate to have coverage cannot stand without the penalty -- based on Chief Justice John Roberts' landmark ruling in the first challenge to the law ... Although the issue will play out in the courts, Congress will face pressure on how to handle the decision." [ Texas v. U.S. , No. 18-167 (N.D. Tex. Dec. 14, 2018)]
Kaiser Health News

District Court Declares Entire ACA Unconstitutional: What That Could Mean for Employers and Plan Sponsors

"No employer shared responsibility.... [I]nvalidation of the ACA's prohibition on preexisting condition exclusions would resurrect the HIPAA portability rules in place prior to the ACA.... Plans would be given greater flexibility to apply cost-sharing on participants.... Employers and plan sponsors would no longer be required to extend health coverage to dependent children until age 26.... [P]lans would not need to distribute summaries of benefits and coverage.... [The] tax on high-cost health care (the so-called 'Cadillac Tax') would finally be invalidated[.]" [ Texas v. U.S. , No. 18-167 (N.D. Tex. Dec. 14, 2018)]
Proskauer's ERISA Practice Center

District Court Rules ACA Unconstitutional

"Besides determining whether to join one side or the other of this lawsuit (nearly two-thirds of states are now involved) and ongoing questions about the role to play in health insurance exchanges, many states are faced with determining the extent to which they will support association health plans and short-term, limited duration insurance, whether they will expand Medicaid coverage, and whether they will seek waivers of ACA requirements." [ Texas v. U.S. , No. 18-167 (N.D. Tex. Dec. 14, 2018)]
Ballard Spahr LLP

Democratic AGs Ready to Appeal Texas Decision: What Comes Next

"On December 17, 2018, Democratic attorneys general -- led by California Attorney General Xavier Becerra -- urged Judge Reed O'Connor of the Northern District of Texas to allow for an immediate appeal of his decision in Texas v. Azar to the Fifth Circuit Court of Appeals. The attorneys general represent states that had intervened in the lawsuit to defend the [ACA]; they ask Judge O'Connor to [1] confirm that the ACA's protections remain fully in effect nationwide and [2] allow for a prompt appeal to the Fifth Circuit. The states ask for a ruling on these requests by Friday, December 21, 2018, to avoid disruption in 2019 and to quickly resolve these critical legal questions."
Katie Keith, in Health Affairs

Reminder: Report Moving Expense Reimbursements as Taxable Income

"Businesses that reimburse employee moving expenses should review their practices in response to changes to the Internal Revenue Code rules on qualified moving expenses.... To qualify for the transition rule, the payments or reimbursements must be for qualified expenses which would have been deductible by the employee if the employee had directly paid them before Jan. 1, 2018. The employee must not have deducted them in 2017." Solutions Law Press

[Opinion]

Telemedicine: The Promise and the Performance

"[T]he average patient spends over 100 minutes commuting, waiting, and filling out paperwork for every 20 minutes of face time with a doctor. Telemedicine offers significant relief from this burden ... While nationwide use of telemedicine increased by 643 percent from 2011 to 2016, state and federal policymakers should remove more barriers to telemedicine." The Heritage Foundation

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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2018 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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